Chris Dillow 

When mergers fail

Chris Dillow

Chris Dillow
When mergers fail

When he recently announced a rights issue and dividend suspension Jonathan Lewis, CEO of Capita, said the company had in the past placed “too much emphasis on acquisitions to drive growth”. Last month Micro Focus announced poor results in part because of the disappointing effect of its acquisition of Hewlett Packard Enterprises's software business. And in the US one of the worst performing major stocks recently has been General Electric, which has a long history of acquiring other businesses. All these events should remind investors that we must be much more sceptical about the benefits of takeovers.

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